Two of retail's biggest names roared back on to the stock market on Thursday as former Tesco chief executive Sir Terry Leahy and Topshop boss Sir Philip Green successfully tapped into the public markets' appetite for discount retailers.

Leahy is chairman of B&M Value Retail which debuted on the London Stock Exchange at a value of £2.7bn, putting it just outside the FTSE 100.

The three Arora brothers, who built the company into a 350-store chain, and their private equity backers, Clayton, Dubilier & Rice, shared a £1bn payout as the retailer launched at a share price of 270p, towards the upper end of a mooted 230p to 290p range.

Leahy's share in that bonanza and the stake he holds in the listed business was not revealed in the company's prospectus, which was issued via the Luxembourg stock exchange, where B&M is officially headquartered. The document said Leahy did have an interest in the company but that it was held via a Cayman Islands registered fund, which controls CD&R's 31.4% stake in the retailer.

Leahy's return to the stock market pits him against his former colleague, Philip Clarke, who now runs Tesco, as well as the supermarket's former finance director, Andy Higginson, who chairs rival discounter Poundland.

Meanwhile, Green's Shelton Capital fund, controlled by his Monaco-based wife Tina, held on to all its shares in Mysale when the Australian online fashion flash sale operator confirmed its float price on Thursday. Shelton's 22% stake, bought only last month, was worth £75m at the 226p launch price, which valued the company at £340.5m.

Green, who has not held stock in the public markets since he was ousted from discount retailer Amber Day almost three decades ago, said: "I think Mysale's in an interesting sector and I like the global aspect. It's got no debt and cash in the bank, and they are good ingredients to start with."

Green, who said he was happy to play a backseat role as a shareholder rather than joining the company's board, also said he liked the fact that the founding family investors were retaining an interest in Mysale after the flotation.

Founder Jamie Jackson took out £5.5m, but retains a 31.5% stake in the business. However, his brother Carl Jackson, the firm's chief executive, sold his entire 8% stake, worth £24.5m, and their private equity backer Insight Venture Partners halved its stake to 5.2%, taking an £18m payout.

Brothers Simon and Bobby Arora will continue to run bargain basement chain B&M, which they bought in 2004 when it had just 20 outlets. They each hold a 14% stake in the business. The business is retaining £75m of the money raised to invest in expanding in the UK and Europe.

Shares in B&M rose more than 6% to 287p on the first day of trading as investors were eager to get a stake in the fast-growing discount sector, even though B&M's rival Poundland has had a bumpy ride since it floated in March.

Simon Arora, the chief executive, said: "We are delighted that investors have demonstrated their support for B&M and its growth story in the value sector and that they share our excitement about the group's future."

Analysts said the successful flotations of B&M and Mysale showed that the market enthusiasm for retail initial public offerings had not faded. There had been fears that the market was drying up after clothing chain Fat Face recently abandoned plans for an IPO and videogame seller Game Digital priced its flotation at the lower end of expectations. A string of recently floated retailers including Pets at Home, AO World and Card Factory have also slipped below their offer prices. B&M was valued ahead of rival Poundland, which dipped below £900m yesterday as its shares fell 2.35%.

Kate Calvert, an analyst at Investec, said: "Deals are still getting done. There have been a huge number of IPOs in the past few months, but retailers that are different and have attractive stores are still finding investors. They are just being a bit more selective."

But Espirito Santo analyst Tony Shiret warned that investors might be paying too much for discount retailers just as shoppers are getting more money to spend.